India's business houses increasingly rely on NGOs for spending corporate social responsibility funds: Crisil

By Our Representative
India’s top consultants, Crisil, in its latest “CSR Yearbook”, have said that Indian companies’ attitude towards corporate social responsibility (CSR) “seems to be changing ever so slowly” even though they are “realising that businesses can sustain and thrive only if the communities they serve also endure and flourish.”
Noting that in fiscal 2016, India Inc “inched closer to the 2% CSR spending mandated by the Companies Act, 2013”, Crisil, which has based its analysis of 4,887 companies listed on the Bombay Stock Exchange, says, only “1,505 of them, or 30%, met the criteria stipulated in the Companies Act for mandatory spending and reporting on CSR in fiscal 2016.”
“Of this lot, 77% reported their CSR spend”, says Crisil, adding, 7% of the eligible companies “did not disclose such details.” Crisil does not include unlisted companies in its analysis “for want of data”.
The Companies Act, 2013, requires corporates to spend at least 2% of their average net profit of the past three years on CSR activities. Fiscal 2016 was the second year of implementation of the CSR obligation.
Pointing out that the companies’ CSR spending “edged up to 1.64% in fiscal 2016, compared with 1.35%”, in fiscal 2015, Crisil says, “The absolute money spent by them was over Rs 8,300 crore compared with Rs 6,800 crore in fiscal 2015.”
However, it underlines, “To reach the mandated 2% mark, these companies would have had to spend another Rs 1,835 crore”, adding, “There were 133 companies that either didn’t spend a dime, or were still freezing their CSR agenda.”
“The spending profile of larger companies improved significantly, with more than half of them adhering to the 2% mandate versus roughly a third last year”, Crisil says, emphasizing, a major reason why there was 22 percentage point jump in adherence by the larger companies is “they are using implementing agencies, mainly non-governmental organisations (NGOs), for execution.”
Noting that “partnership with NGOs helps boost compliance”, Crisil says, “Interestingly, over 84% of the large companies – with sales of Rs 10,000 crore or more – use implementing agencies”, though regretting, “Somewhat counterintuitively, many smaller ones prefer going solo.”
“In fiscal 2016, more than half of the companies spent 2% or more, except those from telecoms and IT”, says Crisil adding, “Commodities and diversified industries stood out, with 60.2% and 59.2%, respectively, of companies in the sector spending 2% or more. Telecoms performed poorly with nearly half of the companies spending less than 1%.”
“What’s good to see is education and healthcare getting the bulk of CSR spend”, says Crisil, adding, “That’s heartening given that, as a percentage of total government expenditure, the money set aside in the Union Budget for 2015-16 – Rs 68,306 crore for education and Rs 44,516 crore for healthcare – is well below what other BRICS nations commit normatively.”
It recommends, “Something similar can be done in sports, where a minuscule Rs 1,592 crore was budgeted last fiscal so that India can harvest a better medals tally at the next Olympics in Tokyo.”
“Fiscal 2016 saw some companies announcing that they were joining hands for CSR activity, even as Prime Minister Narendra Modi himself weighed in on its many virtues on several occasions”, Crisil says, though adding, “Yet, actual instances of collaboration have been hard to come by.”
Under the earlier CSR provision in the Companies Act, 2013, a company could conduct activities only on its own or through a holding, subsidiary or associate company. But this changed with a February 2014 notification, which allowed two companies to undertake CSR activities jointly through a separate legal entity that could be a trust, society, or a third company.
“This is particularly beneficial to smaller firms that find it hard to spend on CSR projects directly given their relatively modest corpus”, Crisil notes, adding, “However, large corporates stand to gain no less since collaboration is the greatest force multiplier when it comes to making an impact.”

Comments

Avoidable Narmada floods: Modi birthday fete caused long wait for release of dam waters

Counterview Desk Top advocacy group, South Asia Network on Dams, Rivers and People (SANDRP), has accused the Sardar Sarovar dam operators for once again acting in an "unaccountable" manner, bringing "avoidable floods in downstream Gujarat." In a detailed analysis, SANDRP has said that the water level at the Golden Bridge in Bharuch approached the highest flood level on September 17, 2023, but these "could have been significantly lower and much less disastrous" both for the upstream and downstream areas of the dam, if the authorities had taken action earlier based on available actionable information.

Biden urged to warn Modi: US can declare India as worst religious freedom offender

By Our Representative During a Congressional Briefing held on Capitol Hill, Washington DC, Nadine Maenza, former Chair of the United States Commission on International Religious Freedom (USCIRF), has wondered why the Biden administration should raise issues of mass anti-minority mob violence -- particularly in Haryana and Manipur -- with Modi. Modi should be told that if such violence continues, the US will be “compelled by law” to designate India as one of the world’s worst offenders of religious freedom, she urged.

From 'Naatu-Naatu' to 'Nipah-Nipah': Dancing to the tune of western pipers?

By Dr Amitav Banerjee, MD* Some critics have commented that the ecstatic response of most Indians to the Oscar for the racy Indian song, “Naatu-Naatu” from the film, “RRR” reeks of sheer racism, insulting visuals and a colonial hangover. It was perhaps these ingredients that impressed the Academy of Motion Picture Arts and Sciences, one critic says.

Why iconic Urdu book stall, publishing house Maktaba Jamia died an 'unnatural' death

By Firoz Bakht Ahmed* We have all grown through the fragrant flavours and flairs of our childhood, one of them being our childhood mother-tongue historic magazines like, “Thakurmar Jhuli” (Bengali), “Khilauna”, Payam-e-Taleem" (Urdu), “Hans” (Marathi), “Parag” (Hindi), “Chitralekha” (Gujarati), “Chandamama” (Telugu), etc. I “drank” Urdu while suckling his mother and learnt the language not from any madrasa, school or college but from these publications only — my treasure trove!

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah* The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual.

Asset managers hold '2.8 times more equity' in fossil fuel cos than in green investments

By Deepanwita Gita Niyogi* The world’s largest asset managers are far off track to meet the 2050 net zero commitments , a new study released by InfluenceMap , a London-based think tank working on climate change and sustainability, says. Released on August 1, the Asset Managers and Climate Change 2023 report by FinanceMap, a work stream of InfluenceMap, finds that the world’s largest asset managers have not improved on their climate performance in the past two years.

Evading primary responsibility, ONGC decides to invest Rs 15,000 crore in sick subsidiary

By NS Venkataraman* It is reported that Oil and Natural Gas Corporation (ONGC) will infuse about Rs 15,000 crore in ONGC Petro-additions Ltd (OPaL) as part of a financial restructuring exercise. ONGC currently holds 49.36 per cent stake in (OPaL), which operates a mega petrochemical plant at Dahej in Gujarat. GAIL (India) Ltd has 49.21 per cent interest and Gujarat State Petrochemical Corporation (GSPC) has the remaining 1.43 per cent.

Why Bangladesh is achieving 'new heights' amidst economic collapse of Pakistan

By Sufian Siddique* Pakistan's economy is on the brink of bankruptcy like Sri Lanka's. Pakistan's foreign exchange reserves have fallen below $3 billion. They have asked the IMF for a 'bailout loan' a long time ago, but the IMF is trying to impose strict conditions that Pakistan's current ruling coalition has no capacity to meet. Even China and Saudi Arabia, Pakistan's long-standing loyal friends, are now reluctant to shoulder Pakistan's burden.

Sales, profits of Indian firms 'deteriorate', yet no significant increase in cost pressures

By Our Representative The Indian Institute of Management-Ahmedabad's (IIM-A's) latest Business Inflation Expectations Survey (BIES), a monthly exercise, has said that while cost perceptions data does not indicate significant increase of cost pressures, sales and profits of the Indian firms have deteriorated.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Search This Blog